Washington, DC, May 10, 2001 — The
Commodity Futures Trading Commission (CFTC) and the Securities and
Exchange Commission (SEC) today announced that they proposed joint
rules to implement new statutory provisions relating to security
futures products.

The Commodity Futures Modernization Act of 2000
(CFMA), enacted last December, lifted the ban on the trading of futures
contracts on single stocks and narrow-based security indexes –
collectively referred to as security futures products. The CFMA also
established a framework for the joint regulation of security futures
products by the CFTC and SEC. Futures contracts on broad-based indexes
are under the exclusive jurisdiction of the CFTC.

The joint rules proposed by the CFTC and SEC relate to
the distinction between broad-based and narrow-based security indexes.
The CFMA itself defines the criteria for an index to be considered
"narrow-based," including, among other factors, the market
capitalization of each security in the index and the dollar value of that
security's average daily trading volume. The statute requires the
two agencies to jointly specify the methods that must be used to
determine these values. The proposed rules are designed to fulfill that
statutory mandate, as well as to address other issues that arise in the
application of the definition of narrow-based security index.

Trading in security futures products may begin on
August 21, 2001, provided that certain regulatory requirements are met.
The period for public comment on the proposed rules will end 30 days from
the date of their publication in the Federal Register. A copy of
the proposed rules will also be available as of tomorrow on the websites
of the CFTC and the SEC, at www.cftc.gov and www.sec.gov, respectively. After
considering any comments, the agencies expect to adopt final rules prior
to August 21.